Who took all of America’s Manufacturing Jobs?

The decline in manufacturing employment in the U.S. has many causes. Some of them policy related, but others are due to technological innovation. Here Quartz reports on a study that tries to measure the impact of the proliferation of industrial robots on the U.S. labor market. The authors find that each additional robot reduced employment by 3-6 workers.

In a recent study (pdf), economists Daren Acemoglu of MIT and Pascual Restrepo of Boston University try to quantify how worried we should be about robots. They examine the impact of industrial automation on the US labor market from 1990 to 2007. They conclude that each additional robot reduced employment in a given commuting area by 3-6 workers, and lowered overall wages by 0.25-0.5%.

A central question about robots is whether they replace human workers or augment them by boosting productivity. Acemoglu and Restrepo’s research is a powerful piece of evidence on the side of replacement. So, brace yourself: According to the International Federation of Robotics, there are already between 1.5-1.75 million industrial robots in operation, and some observers expect that number to more than double by 2025.

Industrial robots are most commonly used in the automotive industry, which accounts for 39% of robot usage in the US. It’s no surprise, then, that workers in America’s Midwestern carmaking capitals have been the most affected by automation.

Jeremy Jones, CFA

Jeremy Jones, CFA is the Director of Research at Young Research & Publishing Inc., and the Chief Investment Officer at Richard C. Young & Co., Ltd. Jeremy is a contributing editor of youngresearch.com.